ANINDA GHOSH.

A YOUNGISTAN BUDGET- AN EPOCH AT THE END OF A BLIND ALLEY, A DECADE OF SHAME

A
Youngistanbudget—an epoch at the end of
a blind alley, adecade of shame

Introduction:

Aug 2014 has created some extremely proud moments for India-- at least short lived. After BRICS Bank & SAARC Bank , Modi is on his prowl to SAARC nations --- Buddhist kingdom of Bhutan to Hindu democracy of Nepal, both submerged in poverty. And , India has asserted against the Imperialism slogans so popular with left / ultra left brats—Uncle Dunkel go back… And this assertion is coming from a person extreme in right wing of politics , who has asserted & helped India take a center-stage in World politics . Because he has estd a skeleton for a vertibra India, which was going missing. And India has thrown its bouncer to a shaky US—more shivers shall start flowing thru the nerves of NATO.

On June 21 & 22 ICAI organized 2 days’ conference in Bangalore. Main agenda was preparation for budget. What are our expectations from the new govt? This time, for a change , there was an inclusion of a presentation on Indian Economy & the author was none other than recently popular author of the book “ A Decade of Shame”. Generally all our lectures concentrate around taxation aspects & companies act & eco laws like FEMA etc… , which is not relish able by outsiders to profession. I requested Mr Raghu, our new Chairman, to include some non boring topics. In all of our discussions , the main concern that comes out center around the following vicious circle--- a) in Eastern India supplies of CAs far exceed demand & people drift southwards. b) Ahmedabad stands as the worst chapter in campus despite so huge industrial growth of Gujarat, c) in public sector our bills get hung up in case we qualify our reports , & in pvt sector rotation , although brought in recently, it is very crude one & it is too hard for small firms to get good business. d) Indirect tax profession has not grown beyond metros & so many thousands of CAs in practice depend on statutory audits of small entts, internal audits / certifications of big giants, or I tax practices or in a/ctg / share mkt actions; there is a total dearth of excise , sales tax, service tax practices. And this dearth is so huge that we do not mind blind signing of records , despite so many CAs found guilty of misconduct… across the globe knowingly / unknowingly we have defaulted, & the professional n unprofessional bosses, the promoters & govt servants alike , the panchayat / local bodies that take our services … we are whisked by all… to sign what is given to us,… in pvt sector every time you run the risk of losing the client… whether you are big 4 or a tiny firm.

After the seminar that was more of a fair of families , with food stalls , free snax, fun fare… the promoters got the flair of tax saving in the best of tax heavens in India--- the housing & infra sector, the black money’s own heaven of tax-less cap gains—Bangaluru, we got out for Puducherry. There are 2 ways from Blore that lead to Puducherry…. We went by the 4 lane route via Vellore, having a glimpse of the Golden temple . This temple full of gold has never been raided like its Tirumala counterpart, but to many who know this temple’s source of gold shall be a source of mystery always. ,….only diff with the richest God of Tirumala is that it is pretty new & not so well known. We went there to meet my cousin’s wife, in coma & under ventilation, after a head on collision on the East Coast Road. But she died just after we reached… the cremation ground was excellent … manual burning spread over 8 hours…. On the left Muslim & Christian burials , on the right Hindu cremations… a perfect blend of Secularism near Aurovilla--- the global village hotspot… and an excellent trauma hospital so neat & clean … so open… skeleton dissections in open rooms… open air modern day cafeteria in the hospital & a sultry , salty , sweaty beach….. may be , the coastline was really good , with a very beautiful road , benches , but we were too stressed… actually weather put it off, and behavior of people incl at bar & restaurants , so very unsocial, so inhospitable, uncaring & unbothered to visiting guests… unprecedented.

My parents visited us last week. Just 2 weeks back they went to Tarapeeth by car from Kol & stayed at a star resort. They were describing very pathetic experience of potholed roads to Tarapeeth post- Bardhaman. My business associates told me about recent drastic improvements in roads to Haldia , which can be reached in 2.5 hrs from Kol nowadays. Digha & Bakkhali my parents reached in 3—3.5 hours from kol. But what pained me is that after a business aloof Left Front Govt did not take care of road developments, in last 2 years+ TMC govt too did not spend on SHs & even NH31 in N Bengal. Compare that with Karnataka & Tamilnadu . During his regime, Mr YSR made good all major AP roads. In Ktaka road repairs started off late , but BJP regime saw many / most of smaller roads, NHs & SHs. Today you can reach Kol to Vizag in 12 hours & Chennai in 24 hrs. Kol to Deli takes 18 hrs, Haldia 2.5 hrs. But pitiable are smaller roads , even if they connect some of best tourist destinations. T NADU has already repaired its roads in last 5 years. But there are black spots in each state. The narrow, winding roads to Ooty from across Madhumalai , Mumbai –Kchi highway at long n short stretches from Murudeswar to Kozhikode are cases in point. The area is too very affluent. Blore is gold capital of India , but Kerala is the land of gold. It looks strange to find a state of narrow winding roads , with official speed limit of 25 kmph, abound in so much of prosperity, near nil poverty, high HDI . And such a huge development divide to the north & south of Kozhikode… Muslim belt of Waynad daily bathes in imported n smuggled gold… Had the budget of GOI been able to bridge such gaps…..

But Kol has changed for better in last 2 years. This is realized by us, who need to slog, dodge &saddle thru the hour-long jams across Blore roads so very patiently. The people used to the daily hanging struggles by Mumbai suburban rail & the famous / infamous jams of Mumbai ( santacruz w to e in 1 hr) , may also be aware of the jam-packed SP Road of Hyd & the jams of Anna Salai , Nagambakkam , T Nagar & other areas of Chennai & all of them breath a very big sigh of relief at the jam-less streets of Kol, load shedding less days n nights, -- the best managed city of India , the best urban landscape… But you have so many lesser brands in Kol compared to Blore, Delhi, Mumbai or even Hyd. Branded hotels, restaurants & malls / apparel stores are so very less here, and Kol is still a heaven for Goldlites-- light gold with excellent artwork , artecraft….Kol has greenery of Maidan far better than garden city…

What India lacks today is skill that edn fails to impart on to us. On the one hand , our IITs & universities hardly qualify within top100 of Asia / even BRICS. Even after All downfalls & systematic degradation over last 35 years JU & CU still stand among first 100--- equivalent to Madras IIT, & far above fat campussed engg colleges @ 1 in each town / city of AP, TN , Ktaka. Running on populism, Mod govt has usurped in creation of quantity instead of improving quality & innovation. My friend Kallol ranked 3rd in MSc Geology from CU , who remained jobless for long & ultimately settled for a LDC’s job in AG Bengal. He, like uncles & aunts , go to office at 12pm & depart at 4 pm. There are plenty from sociology/ anthropology / Comparative literature, wasting life n career at unprimed avenues.

The Budget :

The Finance minister said that 79 central public sector enterprises have incurred losses, of which 49 are sick. At the same time he said that there are 19 that have turned around, indicating that there will be an effort to revive the viable ones that remain competitive. Over Rs 1.57 lakh crore has been pumped into these enterprises over the past few years. Coming days after the finance minister said that being pro-business does not amount to being anti-poor, Tuesday's statement is being seen as a signal that it won't be business-as-usual in matters of economic policy. For a decade, the UPA government had dragged its feet on shutting down even the terminally sick PSUs, despite it clearly stating it as a policy goal. As a result, the government kept on pumping money to pay salaries and keep these money guzzling entities alive, all for the sake of political expediency.

The budget has been a dream budget for Moditva in so far as he has unveiled the power of the common man. He has unleashed Rs 10 K crore of corpus fund for start ups. India has given Flipkart ---21st century’s Indian answer to Facebook. Rug to riches are being woven in doors of Redbus, goibibo… Every odd person from Bengal u meet, or every 2nd Bengalee, would tell u, no indusy has come up in Bengal in last 10 years…. Nor in last 2 years… Correct. Very true. But it is als true that in trade, service, hotel, hospitality gradual rise is happening, & imports—exports also on the wave. Courtesy Mamtadidi, newer & newer trains also see gree signals. But Standard Volvo / AC sleeper buses do not go up . On any date , paying Rs 3500/- a night in Ghy you derive the comfort you derive by paying Rs 1500/- in Bangalore. In a land bereft of any minerals, IT industry can be reckoned as the basic industry that can steadily grow. At least from govt end clear indication has come that strikes shall not be tolerated. But back to back murders in old industries lik jute mills prove beyond doubt that real estate has become a business much bigger than traditional industries. Every industry has got its life. Kol proximate industries have lived that . People have to be brought up from poverty line , to infuse fresher venture capital into the industrial belts of Howrah, Hooghly & 24 Pgs (N).

Flipkart,
Snapdeal, ShopClues
and Infibeam
are among e-commerce notables that have stock options for lowerrung,
non-managerial staff. A typical example of the next inspiring wealth creation
story may well be Shambu Biswas. He joined a six-member Bangalore startup as an
office boy in 2009 and received employee stock options (Esops). That startup is
Flipkart, expected to be valued at around $5 billion after the next round of
fund-raising.Esops given to Biswas, who earns Rs 15,000 a month now, can at
that time cross the Rs 10-lakh mark. They are worth around Rs 7 lakh currently.
And the good thing for Biswas and six other Flipkart
employees at the level of administration assistants and operations executives,
who between them hold 0.07% of the company's Esops, is that they don't have to
necessarily wait for an IPO.Flipkart can offer to buy back and indeed, Biswas
sold 10% of his Esops last year and put Rs 40,000 in a fixed deposit. For
lower-rung employees, this is a game changer - the value of their Esops,
Flipkart says, is between four and thirteen times their annual salaries.
Flipkart's rival Snapdeal
told ET it has four employees at the lower level who have Esops. But Snapdeal
refused to share details of these. Neither did it answer questions on how
employees can encash these Esops. Snapdeal is valued at about a billion
dollars. Infibeam's founder and CEO Vishal Mehta told ET around 15-20 employees
- office boys, customer service staff, administration assistants and delivery
personnel - have Esops. Mehta also said these employees are allowed to encash
some portions of their Esops whenever the company raises fresh funds. Infibeam
is reportedly preparing for a Rs 500-crore IPO,
potentially valuing the company in the Rs 2,500-Rs 3,000 crore range. Singh
started as a warehouse supervisor and was one of the first Shopclues employees.
His Esops will be worth Rs 10 lakh-plus by 2016. That's the time - after four
years of employment -Singh's Esops will be fully vested. But Singh and around
20 other lower-level Shopclues employees will have to wait for an IPO or an
M&A events to encash their Esops. Radhika Aggarwal, co-founder of
Shopclues, told ET "employees cannot encash till there is a buyer ..

In anation, where just 8 industry empires a/c for 60% of bank & FI loans, contrary to becoming a protégé of Adanis & Ambanis, Modi has livened n lined up dreams of d new gennext of netizens that hold a mouthful of sky in the likes of myntra, Zivame, Zorpia, & scores of others, that have made clerks millionaires thru ESOP route. Hindu capital n capitalism????

Startups & SMEs represent the PPP model, hat youngistan dreams everyday--- Modiji finds solace in his days of extreme struggle… In a society that has so far mostly valued only / mainly elitists’ façade n fog, and IASs rub oil in the feet of Rabrhis & Mayavatis… Stephenians pride in doing servitude to an undergraduate alien lady—world’s largest democracy’s de facto head of state, what is the significance n contribution of Senonomics?

India is learning thru transitional tests… the spend on MNERGA has been curbed… & people are smelling rats.. But , people have also seen , how on baseless false promissory basements didi has ruined rlys… and that purely popular & populist measures do not pay…Was it enough that agro labor got jobs for 100 days @ 100/-, much much lesser than MW act promulgations? Without asset creation pure populist ways rekindle inflation.

Health for all, house for all… sanitation for all… electricity for all…. Can all these be any govt’s prime prerogatives, with a permanent brake on inflation? India , at central planning level,m has a very big control panel—Planning Commission, but no conspicuous corpus… So, health for all means FDI business & their enhanced business eans group protection to a class & a creed. FDI in housing means more banking.. –now, more money to people. Why should only Gujaratis be the no 1 business people? There should be many more Shettys in K’taka & more Chettiars in TN, business class in castes other than banias, Agawals, Jaiswals , Jains, Maheswaris… Why should not all Bengalees , all Oriyas, all Assameese, all Himachalis, all Kashmiris, & last but not the least the Biharis---in groups—start up new businesses that they have dreamt throughout their growing years?

Since my growing years, which have seen traditional ghoti unemployed youth feeding on ‘ bekarvata’ , I used to compute , how much money as loans to each of my unemployed young friends, shall yield them freedom from the curse of dependent lives? Just Rs 50 K per head to 10 crore unemployed youth ( by 2020, Indian demography shall have highest working age bracket youth in the world) means Rs 500 K crore. But allotment in budget is just Rs 10 K crore—what shall be done in that? Whatever has been traded & pocketed over last 10 years in the name & guise of NERGA, at least 20—40 % of that should have been spent on entrepreneurial development & that would have seen an emergent India, at the end of a blind alley, a “ decade of shame” .

Budget has provided for a hefty , gigantic Rs 39458 crore to MTNL & BSNL---the thelecom giants, why? Details needed. But was this Tele-Highway so crucial at govt finance n public money? Or was it not better to give this fund to 10 crore unemployed? Social health Card & Bei Padhao programs--- Senonomical welfare doctrines…no govt. could have done with NERGA…

Rs 7060 crore has been allotted to smart city creation. When Mamta set out in making Kol London, all Marhwarihs started taunting. … now London Eye like Kol Eye shall embrace many cities. Now, all Indians alike , residents & aliens to Bengal , like the tripod lights that make New Kol bye pass road the new dreamy dotting lines of Kol. Eco park to Rabiteertha are newer additions to cultural extravaganza of Kol; Ganga cleaning that GOI has ventured just thru this budget is 2 year old already in Kol & Kol happens to be only Indian Metro on the banks of its biggest & most sacred river.

Sanitation
projects to reduce open
defecation, increasing green
cover and emphasis on creating assets form
the crux of the Narendra Modi-led government's blueprint for redeploying UPA's
flagship social
sector programme — the Mahatma Gandhi National
Rural Employment Guarantee Act or MGNREGA. Top officials aware of the
government's re-orientation roadmap for the rural employment guarantee scheme,
being steered by rural development minister Nitin Gadkari, told ET that
assessment of its outcome would go beyond number of man days of work offered to
tangible ground-level changes it achieved. For instance, people digging a pond
will have to mention the storage capacity being created, its impact on
groundwater level, and so on. Similarly, folks erecting compost pits will have
to outline the quantum of compost they will generate. According to the
officials, it is proposed that about half of the scheme's fund allocations will
be earmarked for rural sanitation projects and plantation of trees along
highways and rural roads. While farm-related projects will continue to get 60%
of MGNREGA
funds, as under the UPA, the NDA is putting in place
a more rigorous system to monitor asset creation. "The leader - who could
be the NREGA sachiv or any villager representing his or her fellow villagers
asking for work under the programme - will have to stipulate the outcomes,"
one of the officials said, requesting anonymity. While payments won't be
contingent on achieving these outcomes, 'consistently poor outcomes will need
to be explained', the official explained. The idea of planting trees and
granting rights
and responsibilities to the poor to boost their income is not new. It had been
used in undivided Andhra Pradesh a few years ago. This idea will now be rolled
out nationally in 2014-15. Villagers will be given Rs 15 as maintenance fee for
every sapling that survives. This is expected to work as an incentive for them
to care for the saplings and follow a specified schedule in the first year of
plantation (apart from watering the plants). As for the sanitation component,
the national sanitation programme will pay for material and NREGA will pay for
labour. Monitoring to see whether intended outcomes are being achieved would
need a higher level of scrutiny than the present system entails. "The
states are a concern. Some have very poor monitoring abilities," the
official conceded. The question is whether these problems should be
fixed using MGNREGA. Corruption and payment delays have shrunk the number of
people seeking work under the NREGA, said Himanshu, assistant professor in
economics at JNU's Centre for Informal Sector and Labour Studies."MGNREGA
is not a sanitation programme, but a safety net for people who can demand work
whenever they need it. In the process, some assets also get created," he
told ET, adding that the Act ceases to deliver 'work available on demand' the
moment it gets linked to another program like sanitation. "What if the
money for sanitation is not released? Then NREGA, with 20% of its budget
earmarked for sanitation, will suffer," he added.

After reading certain reports
by the Municipal Corporation of Delhi stating that 70 per cent of the water
supplied in Delhi is unfit for drinking, 16-year-old Prakriti Singh decided to
be the 'water ambassador' and solve the problem in her own way.After visiting
certain areas in Delhi and getting their water samples tested, Prakriti, a
class XII student decided to work in the Madanpur Khadar area of Delhi and
installed an Aqua Pristine's RO 250LPH water purification system that she claims
purifies up to 1,500 litres of water on a daily basis.

"I found out that over 200
families are staying in Madanpur Khadar and are forced to drink contaminated
water.They aren't well off families who can buy Bisleris for drinking. I
decided to send the water samples to a laboratory and then researched upon the
solutions and technology that can be used to make the water potable,"
Prakriti told PTI.While looking for experts' suggestions was easy, the major
problem came with the funding as the cost involved amounted to overRs.1 lakh, she says."I decided to bake cakes and sell them in
certain functions to generate funds. I also approached certain companies for
donations and could manageRs.1.5 lakh. But now, the problem
arose as to where the plant would be installed," said Prakriti.

The girl, then approached
'Project Why', an NGO working in the area and with their help the water
purification plant was installed in a school run by the NGO in June
2013."So, the water is not just being used by the 200 families but also
the students studying in the school have access to hygienic drinking water. But
the message needs to be spread and people need to understand the importance of
clean drinking water. Hence, I appointed 'water ambassadors' in the school who
would spread the message and the technique in their proximity," she said.

Enthusiastic after the
successful installation of the first plant, she facilitated another
installation at Manav Ashram in Punjabi Bagh last month.Next on her agenda, is
installation of a similar plant in an old-age home in Tughlakabad
area."After my grandfather died of jaundice and certain reports about
contamination of water in Delhi, I toured interiors of Bihar studying water
scarcity and contamination issues. But it wasn't practically feasible for me to
work in those areas, hence I decided to start with Delhi but I plan to take it
to other states as well," she said.

In

NEW
YORK: India had
175,000 millionaire households
in 2013, ranking 15th in the world, according to a wealth report which said the
total number of millionaire households in the world rose to 16.3 million last
year. The Boston Consulting Group's 14th annual report on the global
wealth-management industry 'Riding a Wave of Growth: Global Wealth 2014' said
global private financial wealth grew by 14.6 per cent in 2013 to reach a total
of $152 trillion. The rise was stronger than in 2012, when global wealth grew
by 8.7 per cent. The key drivers, for the second consecutive year, were the
performance of equity markets.India
ranked 15th last year and had 175,000 millionaire households. Its position
improved slightly from 2012 when it had ranked 16 in the world for its number
of millionaire households. India is projected to become the seventh wealthiest
nation by 2018. The number of ultra-high-net-worth (UHNW) households in India,
those with $100 million or more, stood at 284 last year.The total number of
millionaire households reached 16.3 million in 2013, up strongly from 13.7
million in 2012 and representing 1.1 per cent of all households globally. The
US had the highest number of millionaire households at 7.1 million, as well as
the highest number of new millionaires at 1.1 million. Robust wealth creation
in China was reflected by its rise in millionaire households from 1.5 million
in 2012 to 2.4 million in 2013, surpassing Japan. The number of millionaire
households in Japan fell from
1.5 million to 1.2 million, driven by the 15 per cent fall in the yen against
the dollar."As the debate over the global polarization of wealth rages on,
one thing is certain: more people are becoming wealthy," the report said.
As in previous years, North America at $50.3 trillion and Western
Europe at $37.9 trillion remained the wealthiest regions in the
world, followed closely by Asia-Pacific at $37 trillion.A key driver in the
rise of private wealth in the Asia- Pacific region has been strong GDP growth
over the past five years, especially in China, India, and Indonesia, the
report said.Globally, the amount of wealth held privately rose by $19.3
trillion in 2013, nearly twice the increase of $10.7 trillion seen in 2012.The
growth of private wealth was driven primarily by returns on existing assets.The
highest density of millionaire households was in Qatar (175 out of every 1,000
households), followed by Switzerland (127) and Singapore (100).The US had the
largest number of billionaires, but the highest density of billionaire
households was in Hong Kong (15.3 per million), followed by Switzerland (8.5
per million).At an expected growth of 9.1 percent over the next five years,
UHNW households are projected to hold 13 trillion dollars in wealth by the end
of 2018.India's weight
among GEM funds was 7.5% during the peak of 2007, which later declined below 5%
in the middle of 2008. The weight rose to 8.5% in November 2010, but dipped
below 5% within a year. However, it started rising since September last in the
hope of a business-friendly government at the Centre, and ever since Narendra
Modi won the elections by a thumping majority, reigniting hopes of a revival of
stalled projects, Sensex has been flirting with greater heights.Foreign institutional investors (
FIIs) have pumped in nearly Rs 69,000 crore so far this year in Indian
equities. As a result, the Sensex surged 23% in rupee terms, and 20% in dollar
terms, outperforming almost all major global Indices.

Supriya Sule has rightly said, NDA has inherited a De Ja Vu on CAD &
Fiscal deficitfrom UPA2, &not just an indecisivenon-governance. And now it is time for
action.

"We
pulled it off 10 minutes before the end of the game," said a Brazilian
diplomat, requesting anonymity. "The Chinese got the headquarters. The
Indians got the first presidency. The South Africans got a regional
headquarters. We were happy to facilitate all this. And the Russians were happy
that finally there is a bank that could challenge the IMF and World Bank."
Often mocked at as an "impractical idea", the creation of the
bank is the first major achievement of the BRICS countries since they got
together in 2009 to press for a bigger say in the global financial order run by
the International Monetary Fund and the World Bank. "It will help contain
the volatility faced by diverse economies as a result of the tapering of the
United States' policy of monetary expansion," Rousseff said, after the
signing of the document. "It is a sign of the times, which demand reform of
the IMF," she added.

While the announcement about the new bank reflects the growing influence of the
BRICS, which account for almost half the world's population and about one-fifth
of global economic output, it also made huge political statements on behalf of
the five leaders.

"The biggest achievement of the document is that it will be governed
through 'one country, one vote' model. All fears of this turning into a Chinese
bank are baseless," said an Indian diplomat who was part of negotiations.

"With the first bank president coming from India, we will play a major
role in its structuring and policies. Just imagine an Indian heading an
international bank in Shanghai. It's a game changer." With India and China
and three other emerging countries working so closely on global finance, the
rest of the world will be watching BRICS with even more interest.
"Commerce department has come out strongly in support of the South Asia
Development Bank as it will go a long way in facilitating regional integration
through financing of infrastructure for trade," a government official told
ET. "The final call will, however, lie with the partner countries,"
the person added.If agreed
by the partner countries, the bank would be the first for the eight-nation
regional grouping that will provide countries with access to capital to finance
infrastructure for trade facilitation and development.It will
be on the lines of the $100-billion New Development Bank (NDB) announced by the
BRICS grouping of Brazil, Russia, India, China and South Africa last week.
While NDB, to be headquartered in Shanghai, will finance infrastructure and
development projects across the developing world, the proposed South Asia
Development Bank will focus on the eight SAARC nations — Afghanistan,
Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.India has been playing the big brother for the region. It has provided
duty-free, quota-free access to the least-developed countries of the region,
barring just 25 items under the SAFTA goods agreement signed in 2006. The
country is also looking at giving unilateral access to Bangladeshi vehicles to
deliver goods in India."The regional bank could be a turning point in the
history of the South-east Asian regional economic development, as it will provide
impetus to trade in goods, services and investment for development," said
Ram Upendra Das, professor at Research and Information System for Developing
Countries, a New Delhi-based autonomous think tank under the ministry of
external affairs. "No country should have an objection regarding setting
up of the bank though some lobbying would be needed to have the bank's
headquarters in India. But as a big brother, India should also contribute a
substantial share of the corpus," Sahney said.India's
exports to the region grew 15% in 2013-14 to $18 billion while imports
contracted by 8.25% to $2.4billion .There is
already a SAARC Development Fund (SDF), incorporated with a paid-up capital of
$300 million to provide financial assistance to social sector and infrastructure
projects. India contributed $189 million towards it.

Now, it is time for action.We definitely needIITs & IIMs in allstates , as the budget envisaged, but what we
need more is the up gradation ofinfra
&teaching talent poolat existing ones.With much more emphasis onpracticalreal time situations & solns than just theoriesin book pages. Yaa, we needbest quality labs, and more R&Ddedns to industries . Prof Dr Guptaof IIM ( A)repented in adiscussion ,
thatIndian entrepreneurs , promoters
&bighouses alike stilllack in research. They are still falling
back, way behindMNCs &Chineese cos. There maybe failures ,theymust not be punitive. Ideacellsshould be the need of the hour--24*7workingwith new joinees , old
employees &even summer
trainees&fresh grads from IITs, NIITs,other Govt n pvtcollegesalike to putin best efforts to
innovate.Cost of failures has to be
much smaller than cost of success.

It
is time tosee more meaningful
outlaysin quality ednthat does not promote mediocrity. Agro,
irrigation, & handicraft output growthshould be the main objective ofNERGA. NERGA cannotbe
stoppedall of a sudden, wherein
countryhas invested Rs 206K crore in
last 5 years, & providedjobs to 35
crorepeople ( or just 7.5 crore jobs ?)
. Sudden brakeshall suddenly raise the
mobility of marginal & landless farmers .And, NERGAcannot besimplyevaluatedthruthe test paper of how manyassets weremeaningfully created.It has
gived the have nots – mostly the dalits, mahadalits , STs , &the Shudrasthe rights to employment &rights to food. UPA regimegave
them official legal protection against child labor & right to edn. In last
5 yearsthey havelearnt how to live like humans, with heads
held high . NDA mustnip in the bud Ms
Vasundhara Raje’sattempt to terminate
such acts thatreversethe accoladesof such fundamental rights .

But
NDA needs also to garner courage to say No. Once biggest critic of NERGA,
Jaitley-Modi combine should continue NERGA at last year’slevel only for a year , till the substitutes
gain momentum & draw people’sfaith.
Even on GAAR, retrospective taxation, approach should benot too open , not too shut. Cautious but
notreluctant to relegate to the old
faith.

But
if 2 basic major loopholes / shortcomings areto be highlighted of this budget, they are a)Judiciary & b) Handicrafts.Not only that leavesin all SCs, HCs & local / district courts
to be slashed, butno of judgeshave to go up by around 100%. Immediatefill up of32% vacancies is crucial & critical , ifpeoplehave to gain back lost faith innation’sjudicial systems. Political will, accompanied by budgetary
support , can onlyvolta face theappearanceof legal system from a farce to aboon.

A
budget is essentiallya gamble--a gamble that is playedbybusiness , industry, trade , commerce , service sector &
consumingmillions. Success lies in
broad basing the powerful consumers to 1
bn &arrestof fiscal deficit n inflation. Estimates are
hell bent on industrial & service growth, as agro is still at mercy of rain
Gods at most pockets. Scrapping old hogsshould give way to realistically rejuvenating schemes like JNURM.

India
has got the 4th largest platoon of doctors &v engineers in
India, although its MRR is the highest in the world—50K deaths of chidren &
child bearing mothers.And despite
thatwe arethe 7th wealthiestnation in the world , & why not?Inequity in Distribution of wealthhas only ballooned over decades.

Jay Modi, Jay jay
Moditva ,Modiji Namo namo

Talks for the first major
accord in theWorld Trade Organization’s 19-year history collapsed over objections raised by India,
which was seeking to bolster farm protections.Negotiators for a Trade
Facilitation Agreement at WTO headquarters in Geneva failed to agree as a
midnight deadline passed to implement part of the accord by the end of July.
India refused to go along without assurances the pact would allow it to keep
protections for its domestically produced food.“We tried everything we could.
But it has not proved possible,” WTO Director-General Roberto Azevedo, said in
a statement.The failure is a setback for the global trade talks and throws into
question the ability of the WTO to serve as a forum for international accords
as well as its status an arbiter of trade disputes. The U.S.’s envoy to the WTO
last week said a failure to agree would be tantamount to killing the accord,
struck in Bali, Indonesia, in December.The WTO estimated that the deal would have
stimulated the world economy by more than $1 trillion by cutting regulatory
hurdles and red tape at international borders.

‘Square One’

“Now we’re back to square
one, to where we were before Bali,” said Biswajit Dhar, an economics professor
and trade specialist at Jawaharlal Nehru University in New Delhi.“Hopefully,
the members all come back to the table and pick up negotiations instead of
letting them die” as they did during a round of trade talks in 2008, he
said.The U.S. “regrets that a handful of members have decided not to adhere to
their commitment” under the Bali agreement, according to a statement by U.S.
Trade Representative Michael Froman.

“Geneva will be quiet for
the next several weeks,” Froman said in the statement. “This is a good time for
all of us to reflect on these developments and to consider the implications
going forward.”The Bali agreement, reached under Indian Prime Minister Narendra
Modi’s predecessor, lets India and other developing countries subsidize food staples so long as they don’t distort
trade. Members also agreed to negotiate a permanent solution for adoption at a
meeting scheduled for 2017, the text says.Negotiators were trying yesterday to
agree on a technical provision of the trade deal, which would allow nations to
begin steps to ratify the accord in their own countries.

New Phase

“The fact we do not have
a conclusion means that we are entering a new phase in our work -- a phase
which strikes me as being full of uncertainties,” Azevedo said.WTO members
should take the coming weeks to consider how to move forward when they
reconvene in September, he said.Australia’s Minister of Trade Andrew Robb said it was “difficult to
see a way forward in the current circumstances.”“Australia is deeply
disappointed that it has not been possible to meet the deadline,” he said in an
e-mailed statement. “This failure is a great blow to the confidence revived in
Bali that the WTO can deliver negotiated outcomes.”An accord to smooth commerce
at borders, negotiated by all 160 WTO members, is an increasingly unlikely
option, according to a person familiar with the talks, who spoke on condition
of anonymity.WTO members are now talking informally about moving ahead
without India, and may use the already negotiated text as the basis for
those discussions, according to the person.

‘Little Hope’

“Today’s developments
suggest that there is little hope for truly global trade talks to take place,”
Jake Colvin, vice president for global trade issues at that National Foreign Trade Council inWashington, said today in an e-mailed statement.“What is most
impactful is the slowdown or the lost growth opportunities that will happen in
the developing world,” Linda Dempsey, vice president of international economic
affairs at the National Association of Manufacturers in Washington, said before the talks collapsed. The
agreement would have helped U.S. companies expand their exports, she said.U.S.
officials had seen the WTO agreement as a test of Modi’s intent to boost
growth, which has slowed in recent years, and as a way to revive relations
between the world’s largest democracies.U.S. Secretary of State John Kerry and
Commerce Secretary Penny Pritzker pressed Indian officials to advance the accord
during a visit to New Delhi for U.S.-India strategic talks this week.

Latest News 03:14 PM IST
UPSC row: Opposition creates ruckus in Rajya Sabha 03:11 PM IST Iraq jihadists
threaten Kurds after battlefield victories 03:01 PM IST Oriental Bank of
Commerce Q1 net profit up 3% on higher other income 02:30 PM IST Beijing to bar
Symantec, Kaspersky anti-virus in procurement: report 02:25 PM IST The case for
big bang economic reforms Editor's picks NDA proposes action plan to revive
mining Narendra Modi announces $1 billion line of credit for Nepal A happy
consensus on reforms Monetary policy: RBI may hold rates CCI to scan drug
patent settlements The Bharatiya Janata Party’s ascent was seen as the time
when Indian government will finally give up the so-called failed ideas of
service delivery like providing subsidized food grains and instead immediately
move to the smarter option—the cash transfers. Photo: Mint Patriotism is the
last refuge of a scoundrel—Samuel Johnson I suspect that, when Johnson made
that observation, he was referring to the false pretensions of patriotism—the tendency
of selectively using arguments of nationalism and sovereignty when it suits
one’s purpose. I have been quite amused reading the vociferous defence of
India’s stand at the World Trade Organization (WTO). The deadline for resolving
the ensuing stalemate is Thursday. While I support not just India’s stand on
the WTO but also the inherent reason for it (the National Food Security Act, or
NFSA), the near unanimous defence does two interesting things. One, it busts
the myth propagated by several commentators on a routine basis that Narendra
Modi’s victory in the recently concluded national elections is essentially a
rejection of the so-called populist social welfare policies which worked on the
principle of entitlements. The NFSA (commonly called the right to food) for the
underprivileged sections of the society was the most reviled among such
schemes. The Bharatiya Janata Party’s ascent was seen as the time when Indian
government will finally give up the so-called failed ideas of service delivery
like providing subsidized food grains and instead immediately move to the
smarter option—the cash transfers. That is, if the new government did not scrap
laws like the NFSA to begin with. Two, it exposes the dichotomy, if not the
downright hypocrisy, of those commentators who, in the past never tired of
arguing against the NFSA and characterized it as possibly the most ruinous
government scheme ever, but have all of sudden rediscovered why India must
defend it tooth and nail before the whole world. It is unlikely they changed
their opinion of the NFSA overnight. It is to them that I dedicate Johnson’s
quote above. Let me take the first one first. In short, the WTO issue is as
follows. India is being blamed globally for holding up the Trade Facilitation
Agreement (TFA) in the WTO because it wants the freedom to provide whatever
subsidies it deems fit to its farmers domestically to ensure the implementation
of the NFSA. Readers should know that running a successful NFSA by providing
subsidized food grain would necessitate the government to procure and store
huge quantities of grains. Such procurement will require paying increased
minimum support prices (MSPs) to incentivize farmers to sell their produce to
the government and not in the open market. This will amount to foreseeably
increased production subsidies. Most developed countries, and several key
developing countries as well, oppose such subsidies once the Indian subsidies
breach a certain threshold. But since India has enacted the NFSA, it is bound
by domestic law to provide such subsidies. Hence the deadlock. But what makes
this stalemate truly intriguing is that the TFA will benefit India since it
will simplify customs procedures and reduce the transaction costs for trade.
Moreover, if instead of production subsidies like MSPs, India were to shift to
income transfer to farmers and consumers, it would be fine by the WTO
regulations. Income transfer or direct benefit transfers (DBT), as they more
commonly known in India, would imply farmers would produce at the costs prevailing
in the market and consumers (including the poor) would purchase at the market
price while the government transfers money to the bank accounts of the farmers
and the consumers it wants to support. The previous United Progressive Alliance
(UPA) government was castigated by many of the commentators I referred to for
not adopting such cash transfer if at all the right to food must be enacted.
So, on the face of it, India appears to be blocking a global trade agreement
that is to its own advantage and which it can possibly adopt if it were to
dedicate itself to moving in the direction of cash transfer. Is India playing
spoilsport? No, it is not. It has genuine concerns about the large number of
poor in the country and wants to provide them a modicum of decency by not
letting any one of them go hungry. However, it busts the myth propagated by
several commentators that the National Democratic Alliance’s (NDA’s) ascent
marks the end of the so-called populist policies. Of course, there will be
tweaks in policy but it is unlikely that the NDA disagrees with the populist
agenda of the UPA. If anything, it was the BJP-led government in Chhattisgarh
that provided the role model for the NFSA. Frankly, I do not think UPA lost
because it legislated the NFSA (which incidentally the BJP supported
wholeheartedly) or persisted with the national rural employment guarantee
scheme. The UPA lost because it could not implement the make-work programme
efficiently. It lost because it could not legislate the food security law earlier
than 2013. And in equal measure, it lost because it could not manage the other
sectors of the economy, which would have improved supply and generated growth.
There were other reasons too—lack of strong leadership and a whole slew of
scams. In fact, I suspect, Indians would not resent an NFSA if the India were
to grow at a faster clip. It is a misleading and mischievous argument that the
rural jobs guarantee scheme and NFSA alone are to blame for inhibiting India’s
growth rate because such an argument absolves the UPA of all other economic
mismanagement under its watch. Moreover, how come the new NDA government did
not scrap the NFSA, or at least attempt to do so, if that essentially was
problem and if that essentially was the NDA’s mandate. On the contrary, we find
NDA defending the NFSA against the world, even to India’s own economic and
diplomatic detriment. But nothing is more absurd than the flip in stance of
several commentators typically opposed to the NFSA all these years. All of a
sudden, there seems to be a groundswell of opinion that India should not agree
to the TFA in order to defend the right of the Indian poor to receive food. In
the past, before the NFSA was enacted, India defended its freedom to provide
price support via MSPs via a more technical argument. India said the prices
used to calculate the subsidy threshold were outdated and too low. However,
post the NFSA, curiously enough, the argument is about India’s policy
sovereignty, which had to cater to the felt needs of the poor and the social
complexity in the country which, in turn, necessitates adopting such an
administratively complicated way of providing subsidies. Funnily enough, many
who make these arguments never really believed in them until now. For long they
held that it was a bad idea to provide a right to food. Bad, not just for the
economy, as it inhibited growth, but also, for the poor, since it made them
lazy. Moreover, it was held that if support must be given then it should be in
the form of cash transfers, not actual foodgrains. Lo and behold! Just as the
new government took over India gets an opportunity, thanks to the WTO, to set
all of that right. Okay, at least some of it. The new government could blame
the proverbial foreign hand and pass the buck, quite justifiably, on the global
developments. This was what the NDA would have done, what according to many
commentators it was elected to do by none other than the neo middle class. Just
as India has deregulated the fuel prices in the recent past, NDA could
deregulate food prices. I would have thought that the concerned commentators
would jump at such an opportunity. But what do they do? Ah, invoke the
patriotism clause. I would have respected it had it been borne out of a genuine
concern for the poor in the country. But it is not and nobody is getting
fooled. Policy Puddle comments on public policy developments every Thursday.

(Reuters) - The World Trade Organization failed on Thursday to reach a
deal to standardise customs rules, which would have been the first global trade
reform in two decades but was blocked by India's demands for concessions on
agricultural stockpiling."We
have not been able to find a solution that would allow us to bridge that
gap," WTO Director-General Roberto Azevedo told trade diplomats in Geneva
just two hours before the final deadline for a deal.

"Of course it is true that everything remains
in play until midnight, but at present there is no workable solution on the
table, and I have no indication that one will be forthcoming."The deadline
passed without a breakthrough. WTO ministers had already agreed the global
reform of customs procedures known as "trade facilitation" last
December, but it needed to be put into the WTO rule book by July 31.Most
diplomats saw that as rubber-stamping a unique success in the WTO's 19 year
history, which according to some estimates would add $1 trillion and 21 million
jobs to the world economy, so they were shocked when India unveiled its veto.

Trade experts say Thursday's failure is likely to
end the era of trying to cobble together global trade agreements and to
accelerate efforts by smaller groups of like-minded nations to liberalise trade
among themselves. India has been vocal in opposing such moves, making its veto
even more surprising."Today’s developments suggest that there is little
hope for truly global trade talks to take place," said Jake Colvin at the
National Foreign Trade Council, a leading U.S. business group."The vast
majority of countries who understand the importance of modernizing trade rules
and keeping their promises will have to pick up the pieces and figure out how
to move forward."

Some nations have already discussed a plan to
exclude India from the agreement and push ahead regardless, and the
International Chamber of Commerce urged officials to "make it
happen."“Our message is clear. Get back to the table, save this deal and
get the multilateral trade agenda back on the road to completion sooner rather
than later,” ICC Secretary General John Danilovich said.U.S. Secretary of State
John Kerry, on a visit to New Delhi, had earlier said he was hopeful that
differences between India and much of the rest of the world could be
resolved.But after Azevedo's speech, U.S. Ambassador to the WTO Michael Punke
was downbeat.

"We're obviously sad and disappointed that a
very small handful of countries were unwilling to keep their commitments from
the December conference in Bali, and we agree with the Director-General that
that action has put this institution on very uncertain new ground," Punke
told reporters.India had insisted that, in exchange for signing the trade
facilitation agreement, it must see more progress on a parallel pact giving it
more freedom to subsidise and stockpile food grains than is allowed by WTO
rules. It got support from Cuba, Venezuela and Bolivia.

India's new nationalist government has insisted
that a permanent agreement on its subsidised food stockpiling must be in place
at the same time as the trade facilitation deal, well ahead of a 2017 target
set last December in Bali.Kerry, whose visit to India was aimed at revitalising
bilateral ties but was overshadowed by the standoff, said the United States
understood India's position that it needs to provide food security for its poor
but India would lose out if it refused to maintained its veto.

DEAL WITHOUT INDIA?

Diplomats say India could technically attract a
trade dispute if it caused the deal to collapse, although nobody wanted to
threaten legal action at this stage. The summer break will give diplomats time
to mull options, including moving ahead without India.Technical details would
still have to be ironed out, but there was a "credible core group"
that would be ready to start talking about a such a deal in September, a source
involved in the discussions said."What began as a murmur has become a much
more active discussion in Geneva and I think that there are a lot of members in
town right now that have reached the reluctant conclusion that that may be the
only way to go," he said.An Australian trade official with knowledge of
the talks said a group of countries including the United States, European
Union, Australia, Japan, Canada and Norway began discussing the possibility in
Geneva on Wednesday afternoon.New Delhi cannot be deliberately excluded, since
that would mean other countries slowing down containers destined for India, but
if it becomes a "free-rider" it will add another nail in the coffin
of attempts to hammer out global trade reform.Trade diplomats had previously
said they were reluctant to consider the idea of the all-but-India option, but
momentum behind the trade facilitation pace means it may be hard to stop.

Many countries, including China and Brazil, have
already notified the WTO of steps they plan to take to implement the customs
accord immediately.Other nations have begun bringing the rules into domestic
law, and the WTO has set up a funding mechanism to assist. But WTO head Azevedo
said he feared that while major economies had options open to them, the poorest
would be left behind."If the system fails to function properly then the
smallest nations will be the biggest losers," he said. "It would be a
tragic outcome for those economies — and therefore a tragic outcome for us
all."

US Secretary of State John Kerry told
Narendra Modi that India's refusal to ratify a key WTO trade deal sent the
wrong message, as he met the country's new prime minister for the first time on
Friday.Kerry expressed optimism about expanding cooperation between the world's
two largest democracies during a first visit aimed at reviving a relationship
clouded by mistrust.But a raft of disputes has cast a shadow over hopes for a
warmer relationship, with India on Thursday blocking a major World Trade
Organization pact to streamline customs procedures and boost global commerce.

During the meeting -- aimed at breaking
the ice with a leader once shunned by Washington -- Kerry told Modi India's
stance was at odds with his desire to open up the country's economy."We
note that the prime minister is very focused on his signal of open to business
and creating opportunities and therefore the failure of implementing TFA (Trade
Facilitation Agreement) sends a confusing signal and undermines that very
message that he is seeking to send about India," a US official quoted
Kerry as saying.

"While we understand India's food
security concerns, the Trade Facilitation Agreement is one that will bring
tremendous benefit, particularly to the world's poor. India's actions therefore
are not in keeping with the prime minister's vision."But Modi told Kerry
developed nations needed to display greater understanding of the difficulties
faced by the developing world in meeting the needs of their poor populations.

"The prime minister emphasized the
need for developed countries to understand the challenges of poverty in
developing countries and their governments' responsibilities in addressing
them...," a statement issued by Modi's office said.The Press Trust of
India national news agency, meanwhile, quoted commerce ministry officials as
saying India remains committed to the deal as long as its demands for
concessions on its anti-poverty food stockpiling deal are met.

The WTO meets again in September and
"we are prepared to engage on day one with a clear understanding that our
position with regard to food security and our commitment to Trade Facilitation
Agreement (TFA) is 100 percent firm," said the official, who could not be
named due to ministry rules.Kerry urged India to work with the United States to
move the WTO process forward, the official said.Speaking on condition of
anonymity, the official also said Modi told Kerry while areas of difference
would always exist, "what is critical is what we do to enhance and build
on our trust".Earlier, Kerry said the United States wanted to "try to
really take the relationship to a new place", following a series of
diplomatic spats with India.Washington has had little relationship with Modi, a
Hindu nationalist who was refused a US visa in 2005 over allegations he turned
a blind eye to anti-Muslim riots as leader of the western state of Gujarat. The
United States caught up with other Western nations during the election
campaign, sending its ambassador to meet Modi who since taking office has shown
no visible signs of holding a grudge over his past treatment.But US officials,
who value frank and free-wheeling relationships with foreign leaders, are
unsure what to expect from Modi who is known for his austere, solitary
lifestyle.

Modi, who as a young man wandered the
Himalayas, is seen as a very different character than his predecessor Manmohan
Singh, a bookish Oxford-educated economist with whom President Barack Obama had
found a kinship.- Break from Middle East efforts -Kerry has nurtured personal
relationships as he pursues key goals including seeking peace in the Middle
East.The top US diplomat went ahead with the trip to India despite working
around the clock to end the bloodshed in the Gaza Strip.

Just hours before his scheduled meeting,
Kerry announced a 72-hour ceasefire between Israel and Hamas but the
humanitarian truce collapsed only hours after it began Friday amid a deadly new
wave of violence.The United States has sought to put relations with India on
firmer ground after the Modi visa row and a crisis in December when US
authorities arrested an Indian diplomat for allegedly mistreating her servant,
infuriating New Delhi.But new disputes have kept arising.

Late Thursday, the WTO said the
160-member body had failed to approve the landmark customs pact.India stalled
the deal as it pushed for a WTO green light on the developing power's
stockpiling of subsidised food. India says the policy is vital to help the
poor, but rich nations charge the practice distorts global trade.The United
States voiced "disappointment" and "regret" over India's
stance, while India said it protested to Kerry over reports from former NSA
contractor Edward Snowden that US intelligence snooped on Modi's Bharatiya
Janata Party while it was in opposition.

US officials, however, have signalled
they do not want to create a new rift by renewing past concerns about Modi's
track record on minority rights.Kerry trod lightly on the issue on Thursday,
saying the two democracies shared the belief "every citizen, no matter
their background, no matter their beliefs, can make their full
contribution"."From women's rights to minority rights, there is room
to go further for both of us," Kerry said.

US warns Indian threat will 'flip the lights' off at WTO

Reuters | Jul
25, 2014, 09.34PM IST

GENEVA:
An Indian-led ultimatum to unravel a World Trade
Organization deal struck in Bali last
December would end global trade reform efforts, US ambassador Michael
Punkewarned in a speech to the Geneva-based body on
Friday. "Today, we are extremely discouraged that a small handful of
members in this organization are ready to walk away from their commitments at
Bali, to kill the Bali agreement, to kill the power of that good faith and
goodwill we all shared, to flip the lights in this building back to dark,"
Punke said.

At a meeting in Geneva, diplomats from the 160 WTO member
countries were supposed to rubber stamp a deal on "trade facilitation"
that was agreed at talks in Bali last December. Some estimates say it could add
$1 trillion to the world economy and create 21 million jobs.

But India said it would veto the agreement until it gets what it wants in a
separate area linked to its system of subsidizing and stockpiling
crops. Several countries issued statements
saying that a failure to agree to the deal would be a massive blow to the WTO,
which is trying to emerge from a decade of failed negotiations on further
liberalizing global trade. WTO director general Roberto Azevedo said talks
were ongoing to try to resolve the problem before a deadline of July 31.

"We are informally talking, yes," he told Reuters. When
asked what would happen if there were no deal by July 31, he said: "That's
part of the conversation." A group of 25 countries including
Australia, Canada, Colombia, Mexico, Norway, Switzerland and Thailand said they
were "dismayed" at the failure to agree at Thursday's
meeting. They warned that failing to seal the trade facilitation deal
would unravel the whole package of trade agreements done in Bali, effectively
destroying the chance of further global trade reform, something that India has
long demanded.

"Contradictory stance"

"A decision to step away would be in no one's interest. It would seriously
undermine the ability of the WTO to deliver for the future," the group
said in a statement.

The European
Union gave a similar warning, saying:
"Without adoption of the Trade
Facilitation Protocol by July 31 a great
opportunity to mobilize trade as an instrument for growth and development would
be lost, and the credibility of the WTO, which has during the financial crisis
proven its value as a firewall against protectionism, would be further
damaged."

Japan also said it strongly urged those members who take a "contradictory
stance" to try to achieve the common objective.

Several trade diplomats said they were mystified by India's stance, since it
has not made any specific demands, making it impossible for the rest of the WTO
to resolve the problem.

Some think India might want to bring forward the 2017 target date for agreeing
permanent rules on food stockpiling, or it might try to postpone the July 31
deadline for adopting trade facilitation, linking it to wider negotiations that
the WTO plans to line up by the end of this year.

But the EU said it would not renegotiate existing timelines.

Many diplomats thought India would be reckless to maintain its veto.

"It will be suicidal, absolutely. And that's not a threat, that's just a
statement of fact," said one Western diplomat.

"They say we're going to get what we want or we'll blow everything else
up, but if they do that they won't even get what they want."

Many trade experts think that if global trade negotiations lose momentum again,
many WTO members, including the European Union and the United States, will
effectively give up and focus all their efforts on more ambitious trade reforms
that they are already negotiating bilaterally and in small groups.

Those include regional deals such as the Trans-Pacific Partnership and the
EU-US Transatlantic Trade and Investment Partnership, as well as sectoral
negotiations in areas such as services, information technology and
environmental goods.

NEW DELHI: India's domestic compulsions and the
danger of breaching the subsidy cap for wheat and rice forced the government to
thwart attempts by other World Trade Organization members to push through a new
set of customs rules without addressing its concerns.

The subsidy data, due to be released by the government over the next few weeks,
will reveal that the subsidy on rice was over 9% of the value of production in
2011, while on wheat it was only a shade lower. Although India is safe for the
moment, there is a real prospect of it crossing the 10% limit and facing penal
action at WTO. What has compounded the problem for the government is rising
minimum support price (MSP), higher levels of procurement as well as
depreciation of the rupee against the dollar.

Besides, the 10% ceiling is based on 1986-88 prices, while actual subsidy
calculations are based on current prices.

A nationwide Food Security Act is expected to increase the procurement burden,
while MSP has increased by around 10% annually over the past few years. By all
indications, the trend will continue. Add to that the bonus paid by the state
governments. "It's a matter of time before we reach the limit,"
acknowledged an official.

In contrast, other than forced reform at ports and airports, the government
sees little benefit from the trade facilitation agreement, as easier customs
rules are expected to aid imports into the country compared to exports from
Indian shores.

"We have saved MSP and the Food Security Act. If we had stuck to what was
agreed at Bali, it would have sounded the death knell for the Food Security
Act," finance minister Arun Jaitley said on Friday, hours after talks
collapsed at WTO. Jaitely, himself a former trade minister, has been critical
of the Bali deal since it was signed.

While India has been demanding a review of the food subsidy limit for several
years, the developed countries have refused to play ball. In fact, in the
run-up to the Bali ministerial last December, the rich countries had even
refused to acknowledge the food security proposal submitted by G-33, which
includes countries such as Indonesia, Brazil and China. It was only after a
link with trade facilitation was established that food security even came on
the agenda for the ministerial.

Then, the US and European Union put up stiff resistance saying a tweaking of
rules by changing the reference price from 1986-88 to the current rates was
tantamount to reopening WTO's agreement on agriculture, a move that will set a
bad trend. After India held firm, threatening to block a deal at Bali, the
developed countries conceded ground, but only partially. In return for a trade
facilitation agreement by July 31, which is to be implemented next year, they
agreed not to seek penal action even if the 10% subsidy cap is breached. But
there is confusion over how long this "peace clause" is in place. One
interpretation was that it will only be in place till a permanent solution is
found. The other was it will stay intact till 2017.

"It was a play of words and we seem to have settled for a wrong
formulation since a crucial comma is missing," said a top-ranking
official, who did not wish to be identified.

In any case, Indian officials said, there was little effort from the rich
countries to address India's concerns as there were only two meetings of the
committee dealing with the food security problem, while there have been over 20
on trade facilitation since the Bali ministerial. So, when the Narendra Modi
government took charge, India decided to link an agreement on easier customs
rules, for which the deadline ended Thursday night, with finding a permanent
solution on food security.

The US and EU did not heed India's demand, resulting in the latest stalemate
and a fresh round of name calling. Indian officials, however, maintained that
all is not lost and when WTO reassembles after a vacation, fresh attempts would
be made to salvage the deal and things may be back in place by the end of
2014.

While the West has described India as the deal breaker, the government is
refuting the charge. "It is not justified for the simple reason that the
deal was not broken. Pushing the date from July 31 to December 31 is not
bringing the heavens down," an officer said.

NEW DELHI: India's domestic compulsions and the
danger of breaching the subsidy cap for wheat and rice forced the government to
thwart attempts by other World Trade Organization members to push through a new
set of customs rules without addressing its concerns.

The subsidy data, due to be released by the government over the next few weeks,
will reveal that the subsidy on rice was over 9% of the value of production in
2011, while on wheat it was only a shade lower. Although India is safe for the
moment, there is a real prospect of it crossing the 10% limit and facing penal
action at WTO. What has compounded the problem for the government is rising
minimum support price (MSP), higher levels of procurement as well as
depreciation of the rupee against the dollar.

Besides, the 10% ceiling is based on 1986-88 prices, while actual subsidy
calculations are based on current prices.

A nationwide Food Security Act is expected to increase the procurement burden,
while MSP has increased by around 10% annually over the past few years. By all
indications, the trend will continue. Add to that the bonus paid by the state
governments. "It's a matter of time before we reach the limit,"
acknowledged an official.

In contrast, other than forced reform at ports and airports, the government
sees little benefit from the trade facilitation agreement, as easier customs
rules are expected to aid imports into the country compared to exports from
Indian shores.

"We have saved MSP and the Food Security Act. If we had stuck to what was
agreed at Bali, it would have sounded the death knell for the Food Security
Act," finance minister Arun Jaitley said on Friday, hours after talks
collapsed at WTO. Jaitely, himself a former trade minister, has been critical
of the Bali deal since it was signed.

While India has been demanding a review of the food subsidy limit for several
years, the developed countries have refused to play ball. In fact, in the
run-up to the Bali ministerial last December, the rich countries had even
refused to acknowledge the food security proposal submitted by G-33, which
includes countries such as Indonesia, Brazil and China. It was only after a
link with trade facilitation was established that food security even came on
the agenda for the ministerial.

Then, the US and European Union put up stiff resistance saying a tweaking of
rules by changing the reference price from 1986-88 to the current rates was
tantamount to reopening WTO's agreement on agriculture, a move that will set a
bad trend. After India held firm, threatening to block a deal at Bali, the
developed countries conceded ground, but only partially. In return for a trade
facilitation agreement by July 31, which is to be implemented next year, they
agreed not to seek penal action even if the 10% subsidy cap is breached. But
there is confusion over how long this "peace clause" is in place. One
interpretation was that it will only be in place till a permanent solution is
found. The other was it will stay intact till 2017. "It was a play of
words and we seem to have settled for a wrong formulation since a crucial comma
is missing," said a top-ranking official, who did not wish to be
identified.

In any case, Indian officials said, there was little effort from the rich
countries to address India's concerns as there were only two meetings of the
committee dealing with the food security problem, while there have been over 20
on trade facilitation since the Bali ministerial. So, when the Narendra Modi
government took charge, India decided to link an agreement on easier customs
rules, for which the deadline ended Thursday night, with finding a permanent
solution on food security.

The US and EU did not heed India's demand, resulting in the latest stalemate
and a fresh round of name calling. Indian officials, however, maintained that
all is not lost and when WTO reassembles after a vacation, fresh attempts would
be made to salvage the deal and things may be back in place by the end of
2014. While the West has described India as the deal breaker, the
government is refuting the charge. "It is not justified for the simple
reason that the deal was not broken. Pushing the date from July 31 to December
31 is not bringing the heavens down," an officer said.

NEW DELHI: Against the backdrop of
the US blaming India for the failure of WTO talks, Prime Minister Narendra Modi
on Friday said developed countries should "understand" the challenges
of poverty in developing nations and their governments' responsibilities to
address them.Modi conveyed the message to US secretary of state John Kerry and
secretary of commerce Penny Pritzker when they called on him here.

"Prime Minister emphasized the need for developed countries to understand
the challenges of poverty in developing countries and their governments'
responsibilities in addressing them when discussions take place in
international forums," a PMO statement said.The meeting took place against
the backdrop of India taking a tough stance on the issue of foodgrain holding
and food subsidy at the WTO talks in Geneva last night after which the US
blamed it for failure of the negotiations.

Asked about this, external affairs ministry spokesman Syed Akbaruddin said the
Prime Minister articulated India's requirement of ensuring that food security
is provided for a "significant" number of people because of the
circumstances in which the country is.

"I think the PM is on record to have said that development challenges that
developing countries face are something that should be understood by
all."India, as a developing country, has challenges and responsibility to
ensure food supplies to all its people and that is reflected in our stance.
That stance takes into account our needs. If other countries have a different
stance, we understand their perspectives because they come from a different
direction," he said.

The spokesman added "our direction is determined by our current
circumstances which require us to provide food security for a significant
number of people and that is what the PM has said."

Statement by
Nirmala Sitharaman in Lok Sabha Regarding Indias Stand in the WTO

August
5, 2014

1. I am making this
intervention in the House today in order to place before the Hon`ble Members
the facts relating to the stand taken by India in the World Trade
Organization (WTO) recently.

2. The Bali Ministerial
Declaration was adopted on 7 December 2013 on conclusion of the Ninth
Ministerial Conference of the WTO in Bali. Ministerial Decisions were adopted
on ten issues relating to the Doha Development Agenda which is the agenda for
the unfinished Doha Round of trade negotiations, underway in the WTO since
2001.

3. Amongst these Ministerial
Decisions, two are of particular significance - the Ministerial Decision for
an Agreement on Trade Facilitation and the Ministerial Decision on Public
Stockholding for Food Security Purposes.

4. The Trade Facilitation
Agreement is basically aimed at greater transparency and simplification of
customs procedures, use of electronic payments and risk management techniques
and faster clearances at ports. We have autonomously taken several similar
measures such as the `Indian Customs Single Window Project` announced in the
Budget 2014-15 to facilitate trade, under which importers and exporters will
be able to lodge documents at a single point, reducing interface with
Governmental agencies, dwell time and the cost of doing business.

5. The Protocol of the Trade
Facilitation Agreement (TFA) was to be adopted by 31 July 2014 by the WTO.
After this the Agreement would automatically come into force from 31 July
2015 if ratified by two-thirds of the members of the WTO.

6. In contrast to their
efforts on Trade Facilitation in the WTO, some developed countries have been
reluctant to engage on other issues.

7. Seeing the resistance to
taking forward the other Decisions, the apprehension of developing countries
was that once the process of bringing the Trade Facilitation Agreement into
force was completed, other issues would be ignored, including the important
issue of a permanent solution on subsidies on account of public stockholding
for food security purposes.

8. India, therefore, took the
stand that till there is an assurance of commitment to find a permanent
solution on public stockholding and on all other Bali deliverables, including
those for the Least Developed Countries (LDCs), it would be difficult to join
the consensus on the Protocol of Amendment for the Trade Facilitation
Agreement.

9. Without a permanent
solution, public stockholding programmes in India and other developing
countries will be hampered by the present ceiling on domestic support which
is pegged at 10 per cent of the value of production and is wrongly considered
as trade-distorting subsidy to farmers under existing WTO rules. The
existence of such a subsidy element is determined by comparing present day
administered prices with fixed reference prices of the 1986-88 period which
is unrealistic.

10. The problem is a very real
one. Developing countries are finding themselves hamstrung by the existing
rules in running their food stockholding and domestic food aid programmes.
The developed world too had market price support programmes and was able to
move away from such support - though not fully even now - because of their
deep pockets. This is not possible for developing countries. It is important
for developing countries to be able to guarantee some minimum returns to
their poor farmers so that they are able to produce enough for themselves and
for domestic food security.

11. Developed countries
continue to have large entitlements to provide support to farmers. These
would have been cut in the Doha Development Round which unfortunately remains
unfinished. Had this Round, which has development at its core, concluded as
per the agreed timelines and its development agenda, the world would have had
an outcome in a single undertaking in which competing interests could have
been balanced. Today, developing countries are fighting to keep the
negotiations focused on development against the single-minded mercantilist
focus of most of the rich developed world on market access issues.

12. Overall balance is
important even in a limited package of outcomes. The Bali outcomes were
negotiated as a package and must be concluded as such.

13. It is regrettable indeed
that today the WTO is unable to agree even to fast track negotiations on an
issue of such importance to millions of subsistence farmers across the
developing world, while the rich world can continue to subsidise their
farmers unabatedly.

14. The matter came up for
discussion in the margins of the BRICS Trade Ministers meeting in Brazil on
14 July and the G20 Trade Ministers meeting in Sydney on 19 July. It was also
raised by the representatives of some countries in their interactions with
the Indian government. On each occasion I explained that India is a signatory
to the Bali Decisions, including Trade Facilitation and is not standing in
the way of its implementation but is seeking an equal level of commitment and
progress in working on the issue of public stock holding which affects the country’s
livelihood and food security. A permanent solution on food security is a must
for us and we cannot wait endlessly in a state of uncertainty while the WTO
engages in an academic debate on the subject of food security which is what
some developed countries seem to be suggesting before they are ready to
engage on this important issue.

15. Food security is a
humanitarian concern especially in these times of uncertainty and volatility.
Issues of development and food security are critical to a vast swathe of
humanity and cannot be sacrificed to mercantilist considerations.

16. Developing countries such
as India must have the freedom to use food reserves to feed their poor
without the threat of violating any international obligations. This is our
sovereign right. It is our duty to protect our citizens` fundamental rights
to life and livelihood.

17. Agriculture is the
mainstay of the Indian population. In a country of the size of India with 60%
of the population dependent on a relatively unremunerative agriculture
sector, we cannot give up administered prices. This is the only way we can
procure food for the Public Distribution System (PDS), the central pillar on
which our efforts to ensure food security, rest. Public stockholding is a
widely used means to ensure food security in many developing countries where
agriculture is largely rain-fed.

18. We have to look after both
consumer and producer interests. We have to enable our people to live a life
of dignity by ensuring access to an adequate quantity of quality food at
affordable prices.

19. On 25 July 2014, India
made a statement in the WTO General Council conveying, inter alia, that the
adoption of the TF Protocol must be postponed till a permanent solution on
public stockholding for food security is found.

20. India offered suggestions
on the procedure to be followed in order to ensure time-bound delivery of an
outcome on public stockholding for food security. We also urged that a
similar approach be adopted on all other elements of the Bali Package notably
the LDC issues.

21. The integrity of India`s
stand is reflected in our unwavering efforts to offer a way forward in the
face of criticism. Even on 31 July 2014, India offered a way to achieve not
only a permanent solution on the issue of public stockholding for food
security but also to implement the Trade Facilitation Agreement in the agreed
timeframe as well as deliver favourable outcomes for LDCs.

22. We have offered practical
suggestions for the way forward. The issue of a permanent solution on public
stockholding is a simple one that can be addressed very easily as there are
already several proposals on the table. A solution to this simple problem will
be a tremendous relief for millions of farmers and poor consumers.

24. The Director General of
the WTO reported to an informal meeting of the Trade Negotiations Committee
on 31 July 2014 that a solution could not be found to bridge the gap.

25. The General Council
meeting was, thereafter, formally declared closed without adopting the TF
protocol.

26. India stood firm on its
demands despite immense pressure. The Government of India is committed to
protecting the interests of our farmers against all odds. Our farmers work in
extremely adverse conditions, most of them at the mercy of the vagaries of
the monsoon, aggravated today by climate change. For farmers in many developing
countries farming is a subsistence activity, not a commercial one. We are
committed to their welfare and I am grateful for the support and
understanding extended by farmers` organizations in this cause.

27. I must also thank Hon`ble
Members of Parliament, many civil society groups and academicians who have
lent their voice in support of the Government`s efforts to ensure a fair
deal.

28. It is evident from the
expressions of support that India`s stand has resonated across the world and
I take this opportunity to also thank the countries that have stood by India
in the VVTO.

29. India is an unwavering
votary of the multilateral trading system and we reiterate our commitment to
the WTO. We continue to believe that it is in the best interest of developing
countries, especially the poorest, most marginalized ones among them and we
are determined to work to strengthen this institution. The timely correction
of any imbalances or anomalies in the working of the system or its rules is
critical to ensure that the WTO works impartially and fairly in the interest
of all its Members and not just a select few.

30. I am confident that India
will be able to persuade the WTO Membership to appreciate the sensitivities
of India and other developing countries and see their way to taking this
issue forward in a positive spirit. This would be a major contribution by
this institution towards `meeting the global challenge of food insecurity and
would convey -a strong message that .the WTO is genuinely committed to the
cause of development.

Modi’s move to thwart WTO deal causes confusion

By Amy
Kazmin in New Delhi

As
a means to trim the bureaucratic impediments to global commerce, the World
Trade Organisation’s laboriously-negotiated “trade facilitation agreement”
seemed to perfectly align with the red tape-cutting priorities Narendra Modi
highlighted in his campaign to become India’s prime minister.

Yet
Mr Modi, installed in India’s highest office two months ago, effectively torpedoed the WTO’s Bali
deal this week, in an emphatic debut on the world stage that has
left trade specialists and business executives both fuming and confused.

Nirmala
Sitharaman, the commerce minister, cited the need to resolve a separate WTO dispute
over India’svast food
stockpiles, which the erstwhile Congress government had
agreed could be put on the back burner, for India’s refusal to accede to a
seemingly uncontroversial protocol.

Dismayed
Indian businesses were on Friday struggling to understand why the new
administration took such a hardline stance on a deal that would have benefited
them even after several compromises
were offered in eleventh-hour negotiations in
Geneva on Thursday.

“What
do we gain from this – nothing,” said Surjit Bhalla, a New Delhi-based
economist. “It’s a genuine mystery. But when you have Bolivia, Cuba and
Venezuela as your only allies, something is going wrong somewhere.”

Rajiv
Kumar, a senior fellow at New Delhi’s Centre for Policy Research, wrote this
week that India’s “splendid isolation at the WTO” reflected poor advice to a
politician still changing from provincial satrap – mainly concerned with
infrastructure and industrial build-out – to national leader, navigating a
complex international environment.

Mr
Modi is known to run a tight ship, with decision-making consolidated in his own
office, leaving his ministers little autonomy or manoeuvring room in
negotiations. He relies heavily on Arun Jaitley, the finance minister and
former commerce minister in the previous BJP-led government, for policy
guidance.

“It
must be a well thought out and well calibrated decision, with India willing to
take the consequences,” says Shaurya Doval, director of the Indian Foundation,
a conservative think-tank. “The world may disagree, but India has protected its
interests as it has thought them to be.”

Mr
Modi did not comment on the collapse of the WTO talks on Friday, instead taking
to Twitter, the microblogging service, to post a picture of him meeting a
popular Indian cricket player.

As
Thursday’s deadline neared, India’s business press slammed the government’s
stance. In an editorial, the Business Standard newspaper accused the
administration of making a “strategic and tactical mistake” and questioned its
larger international trade policy.

“Trade
facilitation is a universal good; to see India veto that, as well, will cause
other countries to think the worst of India – and of the WTO, which hurts a
WTO-dependent India particularly,” the paper said.

The
Economic Times warned that the collapse of the WTO process would lead to the US
putting greater emphasis on regional trade deals among selected players, from
which India would be excluded.

But
one analyst, who asked not to be identified, suggested that in blocking the
deal the prime minister was less concerned with India’s national interest than
his own.

“Modi
is obsessed with his public persona and was concerned that this could have been
portrayed in the media as having buckled to foreign pressure and sold out the
little people,” the analyst said. “It would have taken the shine what is still
his honeymoon period.”

US
secretary of state John Kerry arrived in India on July 30 for ice-breaking
talks with Prime Minister Narendra Modi, forecasting a transformation in
Washington's relations with New Delhi. Here is what both the countries want
from each other:

India

First strategic dialogue under Modi. To prepare for big visit to Washington in
September for Modi-Obama meet. During last few years while Delhi did little to
boost commercial ties, it was upset about shifting priorities of Obama administration.

India would seek closer cooperation in West Asia where situation is getting
fluid. Besides energy imports, it has a huge diaspora there whose security and
livelihood would get affected if the crisis persists.

Delhi upset with US decision to withdraw from Afghanistan. UPA governments had
conveyed same to Washington. NDA would like to impress upon Obama that
Afghanistan should not become source for terror in India.

The Modi govt would like to work with US for skill development of the Indian
youth that would in turn create job opportunities. Job creation is a top
priority for Modi himself.

Disputes over protectionism and IP rights have soured business climate. India
would like more clarity on these issues from the USA.

John Kerry greets businessman Ratan Tata
before a dinner at the US ambassador's residence in New Delhi.

US

Big opportunity for US to engage with Modi — a leader US denied visa for a
decade & rushed to engage from May 16 onwards. There are expectations that
economy will be opened up further.

US keen to push for removal of obstacles to US firms' participation in India's
nuclear power industry. They would look for some compromise formula.

Last Friday, India blocked WTO reforms, prompting US warning that its demands
on food stockpiling may kill trade reform.

US seeks India's greater involvement in Southeast and East Asia, where China is
making aggressive moves. However, India is cautious.

US keen to push its defence sales to India and defence secretary Chuck Hagel
will be in Delhi in September.

Focus of this round of talks from the US viewpoint will be trade. Kerry will be
accompanied by US commerce secretary Penny Pritzker.

In the clearest articulation of India's
position on the WTO standoff — from the highest level — PM Narendra Modi on
Friday told visiting secretary of state John Kerry that the first
responsibility of his government was to the poorest people of the
country.

Kerry's meeting with Modi saw the two leaders elaborating on their respective
positions on the trade facilitation agreement (TFA) in a forceful manner — even
though officials insisted there was no spat — with Modi insisting that the
interest of the poor was paramount. This was after Kerry told Modi that India's
position on the issue was sending confusing signals to the international community.

"The first responsibility of my government is to the poorest people of the
country," Modi told Kerry in the meeting.

"While we don't oppose the agreement, we believe that the needs of those
living on the margins of the society, not just in India but elsewhere too, have
to be addressed," he added.

US has accused India of not adhering to its commitments under the Bali
agreement in the TFA negotiations. India has blocked negotiations in the
absence of assurances that it would be allowed to maintain its food subsidy
programme. In doing so though, the government has opened itself to criticism
that it is only continuing with the policies of UPA 2.

According to a copy of the background briefing available on the State
Department's website, Kerry told Modi that india was not just giving confusing
signals but also undermining the very image Modi was trying to project of
India.

After he co-chaired the 5th India-US Strategic Dialogue along with his
counterpart Sushma Swaraj Thursday, Kerry had expressed hope a compromise deal
would be worked out and that the Bali agreement could take care of India's food
subsidies.

The TFA negotiations seem to have dominated Kerry's meeting with Modi too.

NEW DELHI/SYDNEY: US secretary of state John Kerry told
Prime Minister Narendra Modi on Friday that India's refusal to sign a global trade deal
sent the wrong signal, and he urged New Delhi to work to resolve the row as
soon as possible.

A World Trade Organization pact to ease worldwide customs rules collapsed late
on Thursday over India's demands for concessions on agricultural stockpiling.

"Failure to sign the Trade Facilitation Agreement sent a confusing signal
and undermined the very image Prime Minister Modi is trying to send about
India," a US state department official told reporters after Kerry's
meeting with Modi.

Kerry was in New Delhi as part of an annual
strategic dialogue to revitalize ties and lay the ground for a visit by Modi to
Washington in December.

The official said the meeting was "strong and positive" despite the
breakdown at the trade talks in Geneva.

Several WTO member
states voiced frustration after India's demands led to the collapse of the
first major global trade reform pact in two decades. WTO ministers had already
agreed the global reform of customs procedures known as "trade
facilitation" in Bali, Indonesia, last December, but were unable to
overcome last minute Indian objections and get it into the WTO rule book by a
July 31 deadline.

"We have not been able to find a solution that would allow us to bridge
that gap," WTO director general Roberto Azevedo told trade diplomats in
Geneva, just two hours before the final deadline for a deal lapsed at midnight
(2200 GMT Thursday).

Most diplomats had expected the pact to be rubber-stamped this week, marking a
unique success in the WTO's 19-year history which, according to some estimates,
would add $1 trillion and 21 million jobs to the world economy.

They were shocked when India unveiled its veto and the eleventh-hour failure
drew strong criticism, as well as rumblings about the future of the
organization and the multilateral system it underpins.

"Australia is deeply disappointed that it has not been possible to meet
the deadline. This failure is a great blow to the confidence revived in Bali
that the WTO can deliver negotiated outcomes," Australian Trade Minister
Andrew Robb said on Friday. "There are no winners from this outcome —
least of all those in developing countries which would see the biggest
gains."

Kerry held out hope that there was a way forward that both addressed India's
concerns about its food security programme as well as advance global trade
liberalization.

India had insisted that, in exchange for signing the trade facilitation
agreement, it must see more progress on a parallel pact giving it more freedom
to subsidize and stockpile food grains than is allowed by WTO rules.

India's new nationalist government has insisted that a permanent agreement on
its subsidized food stockpiling must be in place at the same time as the trade
facilitation deal, well ahead of a 2017 target set in Bali last year.

Move on without India

Some countries have already discussed a plan to exclude India from the
facilitation agreement and push ahead regardless.

An Australian trade official involved in the talks, who requested anonymity to
speak more candidly, said officials were exhausted with the process and that
there was already discussion about major reforms at the WTO and the Doha Round
of trade negotiations, which began in 2001.

"Some see it as a final trigger for ending Doha and pressing ahead with
plurilateral reform, leave behind those that don't want to come along," he
said.

Some nations, including the United States, the European Union, Australia, Japan
and Norway, have already discussed a plan to exclude India from the agreement
and push ahead, officials involved in the talks said.

A Japanese official familiar with the situation said that while Tokyo
reaffirmed its commitment to maintaining and strengthening the multilateral
trade system, it was frustrated that such a small group of countries had
stymied the overwhelming consensus.

"The future of the Doha Round including the Bali package is unclear at
this stage," he said.

New Zealand minister of overseas trade, Tim Groser, told Reuters there had been
"too much drama" surrounding the negotiations and added that any talk
of excluding India was "naive" and counterproductive. "India is
the second biggest country by population, a vital part of the world economy and
will become even more important. The idea of excluding India is
ridiculous."

"I don't want to be too critical of the Indians. We have to try and pull
this together and at the end of the day putting India into a box would not be
productive," he added.

Still, the failure of the agreement should signal a move away from monolithic
single undertaking agreements that have defined the body for decades, Peter
Gallagher, an expert on free trade and the WTO at the University of Adelaide,
told Reuters.

"I think it's certainly premature to speak about the death of the WTO. I
hope we've got to the point where a little bit more realism is going to enter
into the negotiating procedures," he said.

"It's 153 countries. We can't all move at the same speed on the same
things, and it's time to let those that want to do it, do it."

Islamabad, Aug 4 (IANS) India is
"powerful enough" to block an initiative at the WTO, said a Pakistani
daily that, however, noted the move is "something of a U-turn by the
neo-liberal" Indian Prime Minister Narendra Modi.

An editorial in the News International Monday said
that during US Secretary of State John Kerry's visit to India on bilateral
matters "there was slightly less cooperation".

"The US is displeased with India for blocking
an initiative at the World Trade Organisation to streamline customs procedures.
India has said it will only agree to the measure if it is accompanied by a
parallel agreement allowing it to stockpile and subsidise grains.

"The move is something of a U-turn by the
neo-liberal Modi, who had criticised the Congress government for implementing a
similar food security law, and he has obviously angered the Americans,"
said the daily.

It added: "That India is powerful enough to
resist such efforts should be welcomed."

The daily said that Modi struck "another
important blow against the US by criticising the surveillance regime the
superpower maintains around the world".

The editorial referred to the arrest of an Indian
diplomat in the US for underpaying her maid despite asserting immunity and the
travel restrictions the US had placed on Prime Minister Narendra Modi for his
role in the Gujarat massacre, and said: "Kerry had quite the task at his
first meeting with Modi".

"None of these issues, however, mean that the
burgeoning alliance between the US and India has met anything other than a
temporary speed bump. Modi will likely meet President (Barack) Obama at the UN
soon and the two countries are so intertwined on matters of trade that any
problem will remain a minor impediment," it added.

It went on to say that Kerry's statement with Modi
"took a none-too-subtle dig at Pakistan in its reference to terrorist safe
havens and calls for the trial of the Mumbai attack suspects to be speeded
up".

"This should serve as a reminder that Modi's
initiative of inviting (Prime Minister) Nawaz Sharif to his swearing in and the
subsequent exchange of letters may remain little more than a public relations
exercise."

Good
Bye—with a panchanama

Driven
substantially by the higher education sector, real estate deals and mining
income,India’s
black economy could now be nearly three-quarters the size of its reported Gross
Domestic Product(GDP).
These are among the findings of a confidential report commissioned by the
government and accessed exclusively byThe
Hindu.Since there were no “reliable” estimates of black money
generated in India and held within and outside the country, the UPA government
commissioned the National Institute of Public Finance and Policy (NIPFP) to
estimate the black money in India and held overseas by Indians.The Special
Investigation Team on black money, constituted by the Narendra Modi government on
May 27 in compliance with a Supreme Court directive, is studying the
report.Though the report was submitted to the Finance Ministry in December
2013, the UPA’s Finance Minister P. Chidambaram did not place it in Parliament.
Nor has his successor Arun Jaitley done so.The capitation fees collected by
private colleges, on management quota seats in professional courses, last year
was around Rs 5,953 crore, the report estimates.

1)Gaza’s horror continues. Friday’s ceasefire
attempt to stall the violence that has ravaged homes and lives of Palestinian
civilians lasted less than three hours. Israel’s bombing of civilian areas over
the last four weeks continues to wreak breathtaking havoc. More than 100
civilians were killed last Wednesday; more than 70 on Friday. Around 1,600
Palestinian civilians have died so far, more than 7,000 are injured and nearly
half a million displaced from their homes. No image of human tragedy is
prompting a rethink in Israeli policy. UN schools sheltering civilians have
been targeted. Tel Aviv maintains that Hamas remains a threat and that it will
press ahead till its capacities are destroyed. Hamas fires rockets at Israel
daily but the latter is able to successfully intercept them with its advanced
weaponry and continue reacting with disproportionate force. Three Israeli
civilians died from Hamas’ rocket attacks while 63 Israeli soldiers have been
killed during this ill-thought through and unconscionable assault.

It is not clear what Israel’s endgame is. Prime
Minister Benjamin Netanyahu has warned of a prolonged campaign. His government
must know that a violent subjugation of civilian populations works rarely and
is no guarantor of peace and stability. Such State-sponsored campaigns will
have a toxic effect on its society and worsen Israel’s isolation. Accusations
of war crimes too will not go away easily. Tel Aviv must contend with the
effects of world public opinion increasingly arrayed against it as a nation,
even as governments continue to support Israel for most part.

The Obama administration, in a way, articulated the
wedge between State and civil society perspectives through its contradictory
messages on Israel this week. It termed the shelling of a UN school as “totally
unacceptable and totally indefensible” but it also approved an immediate
transfer of grenades and mortar rounds to Israel, apart from shipping rocket
motors two weeks ago. Exporting weapons at this time is also indefensible. The
United States and Israel are equally cynical about Gaza’s suffering.

2) If
it was Uttarakhand in 2013, it is Maharashtra this year. Last week, Malin, a
village near Pune, was flattened by landslides triggered by torrential rains,
killing more than 75 people.

Like Uttarakhand, this tragedy could also have been
avoided — or at least minimised — if the people and local authorities listened
to warnings and had been a little more conscious of the way they were
implementing a project plan. Environmentalists have blamed the
short-sightedness of the government in implementing an employment generation
scheme for tribals that required hill slopes be flattened and tress cut down to
develop cultivable plot. The official data indicate that nearly 28,000 trees
were cut for this project; unofficial figures put the count at 300,000. Malin
was also marked as an ‘ecologically sensitive’ village by the Kasturirangan
committee report on the Western Ghats last year. In 2013, the Union ministry of
environment and forests had notified it as an ecologically sensitive village
and recommended a no-development policy but yet, as the tragedy shows, it was
business as usual at Malin. It’s not only Malin that refused to learn from the
Uttarakhand tragedy; even the Himalayan state seems to have forgotten last
year’s tragedy. The state government is still pushing for hydropower projects
that were blamed for upsetting the ecological balance of the area and it also
restarted the Kedarnath Yatra — the rush of pilgrims can again put pressure on
the fragile ecosystem of the area and this could lead to disastrous
consequences.

3)
We are so close, yet it took 17 years, conceded Prime Minister Narendra Modi,
referring to the fact that his was the first bilateral visit by an Indian PM.
“This pinches, but let me assure you. It will not happen again.”

3)The visits may become
more frequent but Modi’s contribution on Sunday was setting a new template for
the relationship. He has unequivocally underlined that Nepal is sovereign to
take its decisions; that Nepal should decide the pace at which and issues for
which it needs India’s support.

He adopted the role of a
concerned advisor but did not prescribe; he gave a glimpse of the potential
roadmap which can lift both Nepal and India’s economy.

And he reached out to all
of Nepal’s political forces — emphasising democracy which was music to the ears
of traditional parliamentary parties; lauding Maoist transition from war to
peace and endorsing the agenda of federal democratic republic they championed
first; and emphasising on an ‘inclusive constitution’ which pleased Madhesi
forces.

At an Indian embassy
reception right after the speech, Nepal’s power elite could not stop gushing
about the speech.

Shashank Koirala, son of
the legendary democratic leader BP Koirala said, “This is a game changer. Nehru
operated with a certain regional doctrine, which appeared to be divide and
rule. But Modi has recognised that without the region, India cannot grow.”

Khimlal Devkota of the
Maoists said Modi had cleared all the ‘confusion’ that persisted about Indian
intentions. A top Madhesi leader said, “The ball now is in Nepal’s court to
build this relationship.” And a top Nepal Army general called the speech
‘absolutely magnetic’.

Baburam Bhattarai, Maoist
ideologue and former PM, tweeted Modi had won the ‘hearts and minds’ with his
‘magical address’.

4)
Afterrape of 6 year old child in aBangalore school almost sponsored by school
management, now it is the turn for rape of a judge.

The State Bar Council of
Madhya Pradesh (SBCMP) on Monday demanded that the charges of sexual harassment
levelled by an additional judge in Gwalior against a MP high court judge be
thoroughly probed by the Chief Justice of India.

According to reports, the
administrative judge had asked the additional judge to "perform dance on
an item song" at a function at his home and influenced her transfer to a
remote location despite her requests.

She wrote to the President,
the Chief Justice of India and the Union law minister complaining about the
harassment, reports said.

Talking to the Hindustan
Times SBCMP chairman Rameshwar Neekhra said, "This is a very serious
matter. Whether the charges hold any truth or not should be decided after an
inquiry. There should be no room for any aspersion on the integrity of
judiciary. Hence, a thorough probe is badly required."

"We call the judges
'My Lord'. Meaning of the words means we hold them in high esteem and similar
to a god. As per our belief God doesn't do any wrong. Hence, for the sake of
maintaining the integrity of the judiciary the probe is required,” said
Neekhra.

He also said that all
aspects of the case like why the woman judge levelled the allegations only
after she was transferred or why she did not lodge the complaint to the CJI
earlier should be probed.

"If the administrative
judge is found guilty he should be punished and if the woman judge is found
guilty of levelling false allegations against the administrative judge she
should be punished too."

She resigned on July 15 and
wrote to the CJI and others on August 1.

The judge in her complaints
alleged the administrative judge told her "he missed the opportunity of
viewing a sexy and beautiful figure dancing on the floor and that he is
desperate to see the same" a day after his "request".

Reports said she also
alleged that when she spurned the judge's "various advances and malicious
aspirations", he targeted her professionally.

"The administrative
judge, along with district judge and district judge (inspection), possibly made
a false, frivolous, baseless and malicious reporting to the chief justice of MP
and got me transferred on July 8, in the mid-academic session of my daughters
to a remote place Sidhi by overruling the transfer policy of MP HC," she
wrote in her complaint.

She said her appeal for an
eight-month extension so that her daughter, who is in Class 12, could finish
her academic year was rejected.

She has alleged that the
judge mocked her and threatened to "spoil my career completely and make
sure that I face ruinous prospects all my life", when she pleaded against
the transfer.

She also claimed the HC
chief justice declined to meet her when she wanted to apprise him of the
situation.

5) Union
Minister for Urban Development and Parliamentary Affairs M. Venkaiah Naidu
asked the urban local bodies (ULBs) to focus on mobilisation of resources on
their own for improving infrastructure as merely looking up to governments
won’t help.

The
problem starts at the ground level itself as the elected office-bearers of ULBs
are not keen on tax collection with the fear of losing votes and it is
affecting development of towns and cities directly, the Minister said. “That
mindset has to be changed if development is our agenda,” Mr. Naidu said and
asked the ULBs to take up tax collection and development as their prime
responsibility.

Addressing
a press conference here on Sunday he said: “What’s happening now is the ULBs
are approaching municipal ministers of the States concerned for funds, the
ministers are seeking money from their Chief Ministers/State Governments, the
States are moving the Union Minister for assistance and in turn the Centre is
approaching the World Bank.” Ultimately, the burden of repayment of such loans
would fall on people, he noted.

He had met
Chief Ministers of Telangana and Andhra Pradesh K. Chandrasekhar Rao and N.
Chandrababu Naidu respectively on Saturday, explained the Union Urban
Development Ministry’s plans and requested them to inculcate transparency and
accountability among ULBs, Mr. Venkaiah Naidu stated. He had also told them to
focus on development by sorting out issues, if any, mutually as dictating the
State government by intervening their functioning was not the NDA government’s
policy.

Stating
that Tanuku Municipality had succeeded in making people pay taxes on par with
demand Mr. Naidu said a woman chairperson had set up display boards in each
ward citing how much tax is collected in the area and how much was spent on
facilities there.

The ULBs
should levy taxes and collect them properly and spend them with transparency to
address problems such as drinking water, drainage, power supply, roads, slum
development, housing, capacity building/skill development and checking illegal
constructions, the Union Minister suggested.